consolidated financial results for the second quarter ... · consolidated financial results for the...

Consolidated Financial Results for the Second Quarter Ended September 30, 2013 [J-GAAP]

November 8, 2013

Listed Company Name: Sumitomo Metal Mining Co., Ltd.

Code: 5713

Listings: Tokyo Stock Exchange

URL: http://www.smm.co.jp/

Representative: Yoshiaki Nakazato, President and Representative Director

Contact: Kunihiko Miyamoto, Deputy General Manager, PR & IR Dept. TEL: +81-3-3436-7705

Scheduled Date to Submit Quarterly Report: November 14, 2013

Scheduled Date to Start Dividend Payment: December 5, 2013

Preparation of Supplementary Explanation Materials for Quarterly Financial Results: Yes

Briefing on Quarterly Settlement: Yes (for institutional investors)

(Amounts less than one million yen are rounded off)

1. Consolidated Financial Results (From April 1, 2013, to September 30, 2013)

(1) Consolidated Operating Results (% figures show year-on-year change)

Net sales Operating income Ordinary income Net income

Millions of yen % Millions of yen % Millions of yen % Millions of yen %

Six months ended

September 30, 2013 416,014 4.4 40,702 2.4 56,538 44.2 40,024 47.1

Six months ended

September 30, 2012 398,452 -8.2 39,742 -11.9 39,208 -36.3 27,200 -27.6

(Note) Comprehensive income

Six months ended September 30, 2013: ¥113,743 million (270.2%) ;

Six months ended September 30, 2012: ¥30,723 million (-15.9%)

Net income

per share (Basic)

Net income

per share (Diluted)

Yen Yen

Six months ended

September 30, 2013 72.48 64.69

Six months ended

September 30, 2012 48.44 44.70

(2) Consolidated Financial Position

Total assets Net assets Equity ratio

Millions of yen Millions of yen %

As of September 30,

2013 1,491,788 953,870 57.5

As of March 31,

2013 1,351,153 844,547 56.9

(Reference) Shareholders’ equity

As of September 30, 2013: ¥857,607 million; As of March 31, 2013: ¥769,250 million

2. Dividends

Dividend per share

First quarter-end Second quarter-end Third quarter-end Year-end Total

Yen Yen Yen Yen Yen

Year ended

March 31, 2013 ― 14.00 ― 20.00 34.00

Year ending

March 31, 2014 ― 17.00

Year ending March

31, 2014 (Forecast)

— 17.00 34.00

(Note) Revision of dividend projection that has been disclosed lastly: No

3. Forecast of Consolidated Operating Results for the Year Ending March 31, 2014

(From April 1, 2013, to March 31, 2014) (% figures show year-on-year change)

Net sales Operating income Ordinary income Net income Net income

per share

Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen

Full year 812,000 0.4 71,000 -25.9 103,000 -10.5 74,000 -14.6 134.01

(Note) Revision of operating results projection that has been disclosed lastly: Yes

Notes

(1) Change in Important Subsidiaries during the Period under Review (Change in specific subsidiaries that will

accompany a change in scope of consolidation): None

(2) Application of Accounting Procedures Specific to Quarterly Consolidated Financial Statements: Yes

(Note) For further details, please refer to “2. Summary Information (Notes)” on page 3

(3) Change in Accounting Policies or Estimates and Retrospective Restatements

1) Changes in accounting policies in accordance with revision of accounting standards: None

2) Changes in accounting policies other than item 1) above: None

3) Change in accounting estimates: None

4) Retrospective restatements: None

(4) Number of Outstanding Shares (Common Stock)

1) Number of shares issued as of end of period (including treasury stock)

581,628,031 shares at September 30, 2013

581,628,031 shares at March 31, 2013

2) Number of shares of treasury stock as of end of period

29,436,513 shares at September 30, 2013

29,410,627 shares at March 31, 2013

3) Average number of shares during the period

552,202,345 shares for six months ended September 30, 2013

561,513,428 shares for six months ended September 30, 2012

Presentation regarding status of quarterly review procedure

The consolidated financial results presented herein are not subject to the quarterly review procedure specified by

the Financial Instruments and Exchange Act. The review procedure for quarterly consolidated financial statements

specified by the Financial Instruments and Exchange Act has not been completed at the time of the disclosure of

these financial results.

Explanation regarding appropriate use of operating results forecast and other special notes

Forecast of consolidated operating results for the full year ending March 31, 2014, disclosed on May 10, 2013, is

revised in this report. The forward-looking statements, including business results forecast, contained in these

materials are based on information available to the Company and on certain assumptions deemed to be reasonable

as of the date of release of this document and they are not meant to be a commitment by the Company. Also, actual

business results may differ substantially due to a number of factors.

(Supplementary Explanation Materials)

The Supplementary Explanation Materials will be posted on the Company’s website on Friday, November 8, 2013.

1

Contents of the Attachment

1. Qualitative Information on Quarterly Financial Results...................................................................................... 2

(1) Business Performance ........................................................................................................................................ 2

(2) Financial Position .............................................................................................................................................. 2

(3) Forward-Looking Information Including Forecast of Consolidated Operating Results and Other .................... 3

2. Summary Information (Notes) ................................................................................................................................ 3

(1) Application of Accounting Procedures Specific to Quarterly Consolidated Financial Statements .................... 3

3. Consolidated Financial Statements ......................................................................................................................... 4

(1) Consolidated Balance Sheets ............................................................................................................................. 4

(2) Consolidated Statements of Income and Comprehensive Income ...................................................................... 6

Consolidated Statements of Income

(For 2nd Quarter of Cumulative Consolidated Fiscal Period) ............................................................................ 6

Consolidated Statements of Comprehensive Income

(For 2nd Quarter of Cumulative Consolidated Fiscal Period) ............................................................................ 8

(3) Consolidated Statements of Cash Flows. ........................................................................................................... 9

(4) Notes Relating to Consolidated Financial Statements

(Note Relating to the Going Concern Assumption) .......................................................................................... 11

(Significant Changes in Shareholders’ Equity) ................................................................................................. 11

(Segment Information and Others) .................................................................................................................... 11

4. Supplementary Information .................................................................................................................................. 13

(1) Overseas Market Prices and Foreign Exchange Rate ....................................................................................... 13

(2) Sales Volume, Unit Price and Net Sales for Major Products (the Company) .................................................. 13

(3) Output by Product (the Company) ................................................................................................................... 14

2

1. Qualitative Information on Quarterly Financial Results

(1) Business Performance

The overall global economy during the first six months of fiscal 2013, the year ending March 31, 2014 has generally

maintained positive growth, due to the European economy having bottomed out, in addition to the stabilized pace of growth in

the major emerging economies and the moderate recovery trend in the U.S. Meanwhile, the Japanese economy showed steady

improvements, mainly supported by recovery in export environments resulting from the yen depreciation and robust personal

consumption.

In the nonferrous metals industry, nonferrous metal prices, despite their continuing decline, once showed signs of

bottoming out during the first six months of fiscal 2013. In the electronics sector, there were strong demands for

high-performance mobile devices and home electrical appliances whereas demand for flat-panel televisions remained sluggish.

Under these circumstances, net sales in the first six months of fiscal 2013 increased ¥17,562 million from the same period

in the previous fiscal year to ¥416,014 million, mainly due to the yen depreciation. Operating income amounted to ¥40,702

million, a year-over-year increase of ¥960 million, owing to the positive effect of the yen depreciation and other factors, which

offset declination of metal prices. Ordinary income increased ¥17,330 million from the same period of the previous fiscal year

to ¥56,538 million, mainly reflecting favorable results in equity in earnings of affiliates and foreign exchange gains/losses. Net

income for the period under review rose ¥12,824 million year over year to ¥40,024 million.

Operating results by segment are as follows.

The method used to calculate income or loss by the reported segments has been changed effective from the first three months

of fiscal 2013. With regard to the following year-over-year comparison, the figures are compared with the figures of the same

period of the previous fiscal year which reflect the changes in the reported segments. For details of changes in the calculation

method of the reported segments, see “3. Matters Relating to Changes in the Reported Segments” on page 12.

1) Mineral Resources segment

Production continued as planned at the Hishikari mine. The gold output at the Pogo gold mine exceeded levels of the same

period of the previous fiscal year. Production levels and sales volume at the Morenci copper mine increased from the same

period of the previous fiscal year. Nonetheless, segment income decreased year over year due to a drop in copper prices, a

decrease in production in some overseas copper mines, and other factors.

Net sales increased ¥5,277 million year over year to ¥57,345 million, while segment income decreased ¥259 million to

¥34,380 million.

2) Smelting & Refining segment

As for nickel and copper, sales volume declined year over year and prices were lower compared with the same period a year

earlier. Nonetheless, segment income increased year over year due primarily to the yen depreciation and favorable results in

equity in earnings of affiliates.

Net sales increased ¥4,277 million year over year to ¥317,338 million, and segment income increased ¥9,633 million to

¥15,566 million.

3) Materials segment

Net sales declined substantially year over year because of the exit from the bonding wire business. However, segment income

increased year over year supported by increases in revenues primarily resulting from steady demands for high-performance

mobile devices, automobile batteries, and lead frames for home electrical appliances and others.

Net sales decreased ¥12,602 million year over year to ¥74,951 million, while segment income increased ¥5,135 million to

¥5,487 million.

(2) Financial Position

1) Status of financial position

Total assets at the end of the period under review increased ¥140,600 million from the previous consolidated fiscal year-end

to ¥1,491,800 million, reflecting an increase in construction in progress regarding the Taganito Project, as well as an increase

in investment securities, etc.

Total liabilities increased ¥31,300 million from the previous consolidated fiscal year-end to ¥537,900 million mainly due

to an increase in loans payable for the Taganito Project despite decreases in income taxes payable and inhabitants’ taxes, etc.

Total net assets increased ¥109,300 million from the previous consolidated fiscal year-end to ¥953,900 million, and the

equity ratio recovered from 56.9% to 57.5%.

2) Status of cash flows

The cash and cash equivalents at the end of the period under review decreased ¥15,487 million from the previous

consolidated fiscal year-end to ¥224,204 million.

Status of cash flows and their major factors during the period under review are as follows.

Cash flows from operating activities

Net cash provided by operating activities decreased ¥26,254 million year over year to ¥37,786 million mainly due to an

increase in inventories and income taxes paid, despite an increase of income before income taxes by ¥22,148 million year

3

over year to ¥55,995 million.

Cash flows from investing activities

Net cash used in investing activities increased ¥31,669 million year over year to ¥72,211 million mainly as a result of an

increase in expenditures for the capital investment to increase nickel production and for the purchase of investment

securities.

Cash flows from financing activities

Net cash provided by financing activities increased ¥3,303 million year over year to ¥12,041 million during the first six

months of fiscal 2013, despite a decrease in proceeds from long-term loans payable for the Taganito Project, as a result of a

decrease in expenditures due mainly to the lack of payments made to trust account for purchase of treasury stock that was

made in the same period of the previous fiscal year.

(3) Forward-Looking Information Including Forecast of Consolidated Operating Results and Other

In terms of the global economy, while a moderate recovery trend is expected to continue thanks to the stabilizing growth of the

emerging economies and signs of recovery in Europe, the outlook remains uncertain, as concerns toward the government’s

debt ceiling and a scale back of monetary easing in the U.S. may possibly deteriorate the economy. The Japanese economy

shows steady improvements driven by the recovery in export environments due to the yen depreciation. However, concerns

remain that the Japanese economy could be adversely impacted by the overseas economies.

In the nonferrous metals industry, demand for nonferrous metals is expected to be strong and metal prices are expected to

remain firm in the long-term, due to the highly anticipated growth of emerging economies including China. However, price

movements are expected to remain within a narrow range in line with the fluctuations of the economy for the time being.

Under these circumstances, consolidated operating income and ordinary income for the full year ending March 31, 2014,

are expected to decrease by 2.0%–13.0% compared with the previous forecasts released on May 10, 2013.

The forecasts for net sales and segment income by reported segment for the full year ending March 31, 2014 are as follows.

(Reference: Segment income is adjusted to match ordinary income in the Consolidated Statements of Income.)

No revision has been made to the forecast for dividends.

Forecast of consolidated operating results for the full year ending March 31, 2014 (revised)

(Millions of yen)

Mineral

Resources

Smelting &

Refining Materials

Total of the

Reported

Segments

Other

Businesses Adjustments Total

Net sales 110,000 619,000 149,000 878,000 21,000 (87,000) 812,000

Segment

income 67,000 28,000 8,000 103,000 1,000 (1,000) 103,000

(Reference)

Forecast of consolidated operating results for the full year ending March 31, 2014 (previous forecast)

(Millions of yen)

Mineral

Resources

Smelting &

Refining Materials

Total of the

Reported

Segments

Other

Businesses Adjustments Total

Net sales 116,000 671,000 159,000 946,000 19,000 (93,000) 872,000

Segment

income 65,000 37,000 6,000 108,000 1,000 (3,000) 106,000

2. Summary Information (Notes)

(1) Application of Accounting Procedures Specific to Quarterly Consolidated Financial Statements

The tax expenses for consolidated subsidiaries are calculated by multiplying income before income taxes for the period under

review by the effective tax rates on income before income taxes for the fiscal year ending March 31, 2014 including the

second quarter under review, that are reasonably estimated upon the adoption of tax-effect accounting.

4

3. Consolidated Financial Statements

(1) Consolidated Balance Sheets (Millions of yen)

FY2012

(as of March 31, 2013)

Second Quarter of FY2013

(as of September 30, 2013)

Assets

Current assets

Cash and deposits 82,791 83,369

Notes and accounts receivable—trade 92,127 81,798

Short-term investment securities 158,000 141,400

Merchandise and finished goods 62,469 73,413

Work in process 40,299 42,624

Raw materials and supplies 40,194 43,172

Other 74,624 73,055

Allowance for doubtful accounts (252) (286)

Total current assets 550,252 538,545

Noncurrent assets

Property, plant and equipment

Buildings and structures, net 88,663 93,009

Machinery, equipment and vehicles, net 90,837 97,048

Tools, furniture and fixtures, net 4,375 4,337

Land 26,459 26,774

Construction in progress 131,733 164,530

Total property, plant and equipment 342,067 385,698

Intangible assets

Mining right 7,013 7,259

Other 3,368 3,630

Total intangible assets 10,381 10,889

Investments and other assets

Investment securities 396,223 478,197

Other 52,446 78,674

Allowance for doubtful accounts (210) (209)

Allowance for investment loss (6) (6)

Total investments and other assets 448,453 556,656

Total noncurrent assets 800,901 953,243

Total assets 1,351,153 1,491,788

5

(Millions of yen)

FY2012

(as of March 31, 2013)


(as of September 30, 2013)

Liabilities

Current liabilities

Notes and accounts payable—trade 35,212 40,355

Short-term loans payable 67,750 81,916

Income taxes payable 20,279 9,423

Provision for bonuses 3,546 3,578

Provision for furnace repair works 758 1,011

Provision for loss on business restructuring 8 9

Provision for environmental measures 66 13

Other provision 346 133

Other 83,421 71,355

Total current liabilities 211,386 207,793

Noncurrent liabilities

Bonds payable 50,000 50,000

Long-term loans payable 212,323 240,915

Provision for retirement benefits 5,701 5,581

Provision for directors’ retirement benefits 27 24

Provision for loss on business restructuring 37 —


Other provision 238 248

Asset retirement obligations 5,337 6,014

Other 21,505 27,299

Total noncurrent liabilities 295,220 330,125

Total liabilities 506,606 537,918

Net assets

Shareholders’ equity

Capital stock 93,242 93,242

Capital surplus 86,062 86,062

Retained earnings 644,642 674,844

Treasury stock (31,895) (31,930)

Total shareholders’ equity 792,051 822,218

Accumulated other comprehensive income

Valuation difference on available-for-sale securities 24,645 34,986

Deferred gains or losses on hedges (1,856) 17

Foreign currency translation adjustment (45,590) 386

Total accumulated other comprehensive income (22,801) 35,389

Minority interests 75,297 96,263

Total net assets 844,547 953,870

Total liabilities and net assets 1,351,153 1,491,788

6

(2) Consolidated Statements of Income and Comprehensive Income

Consolidated Statements of Income (For 2nd Quarter of Cumulative Consolidated Fiscal Period)

(Millions of yen)


(from April 1, 2012,

to September 30, 2012)




Net sales 398,452 416,014

Cost of sales 336,266 352,128

Gross profit 62,186 63,886

Selling, general and administrative expenses

Sales, transportation and sundry expenses 4,173 4,014

Salaries and allowances 5,047 5,375

Provision for bonuses 456 508

Retirement benefit expenses 390 309

Provision for directors’ retirement benefits 1 2

Research and development expenses 2,978 3,226

Other 9,399 9,750

Total selling, general and administrative expenses 22,444 23,184

Operating income 39,742 40,702

Non-operating income

Interest income 609 1,673

Dividends income 855 1,179

Foreign exchange gains — 3,201

Gain on valuation of derivatives — 677

Equity in earnings of affiliates 3,982 10,912

Other 771 719

Total non-operating income 6,217 18,361

Non-operating expenses

Interest expenses 1,683 1,510

Foreign exchange losses 3,720 —

Other 1,348 1,015

Total non-operating expenses 6,751 2,525

Ordinary income 39,208 56,538

Extraordinary income

Gain on sales of noncurrent assets 36 119

Gain on sales of investment securities 154 —

Total extraordinary income 190 119

7

(Millions of yen)







Extraordinary loss

Loss on sales of noncurrent assets 1 35

Loss on retirement of noncurrent assets 304 340

Loss on valuation of investment securities 5,145 3

Loss on business restructuring 82 —


Loss on change in equity — 101

Loss on sales of stocks of subsidiaries and affiliates — 180

Loss on disaster 11 1

Total extraordinary losses 5,551 662

Income before income taxes 33,847 55,995

Income taxes—current 5,336 12,640

Income taxes—deferred 1,436 668

Total income taxes 6,772 13,308

Income before minority interests 27,075 42,687

Minority interests in income (loss) (125) 2,663

Net income 27,200 40,024

8

Consolidated Statements of Comprehensive Income (For 2nd Quarter of Cumulative Consolidated Fiscal Period)

(Millions of yen)







Income before minority interests 27,075 42,687

Other comprehensive income

Valuation difference on available-for-sale securities (3,277) 10,331

Deferred gains or losses on hedges 1,141 2,092

Foreign currency translation adjustment 1,681 28,766

Share of other comprehensive income of associates accounted for

using equity method 4,103 29,867

Total other comprehensive income 3,648 71,056

Comprehensive income 30,723 113,743

(Comprehensive income attributable to)

Comprehensive income attributable to owners of the parent 30,037 98,214

Comprehensive income attributable to minority interests 686 15,529

9

(3) Consolidated Statements of Cash Flows (Millions of yen)







Net cash provided by (used in) operating activities

Income before income taxes 33,847 55,995

Depreciation and amortization 13,543 15,938

Loss (gain) on sales of noncurrent assets (35) (84)

Loss on retirement of noncurrent assets 304 340

Loss (gain) on sales of investment securities (154) —

Loss (gain) on sales of stocks of subsidiaries and affiliates — 180

Loss (gain) on valuation of investment securities 5,145 3

Loss (gain) on valuation of derivatives 480 (677)

Increase (decrease) in allowance for doubtful accounts 14 33

Increase (decrease) in provision for bonuses (84) (33)

Increase (decrease) in provision for directors’ bonuses (51) (90)

Increase (decrease) in provision for furnace repair works 252 253

Increase (decrease) in provision for retirement benefits (398) 13

Increase (decrease) in provision for directors’ retirement benefits (20) (3)

Increase (decrease) in provision for loss on business

restructuring (646) —

Increase (decrease) in provision for environmental measures 6 (61)

Increase (decrease) in provision for loss on disaster (34) —

Increase (decrease) in other provision 10 (199)

Interest and dividends income (1,464) (2,852)

Interest expenses 1,683 1,510

Foreign exchange losses (gains) 1,202 (1,586)

Equity in (earnings) losses of affiliates (3,982) (10,912)

Suspended business management expense 258 268

Loss (gain) on change in equity — 101

Loss on business restructuring 82 —

Loss on disaster 11 1

Decrease (increase) in notes and accounts receivable—trade 12,778 12,407

Decrease (increase) in inventories 14,544 (12,896)

Increase (decrease) in notes and accounts payable—trade (7,287) 1,410

Increase (decrease) in accrued consumption taxes 1,936 (287)

Other, net (6,543) (736)

Subtotal 65,397 58,036

Interest and dividends income received 7,805 5,012

Interest expenses paid (1,683) (1,477)

Suspended business management expense paid (258) (268)

Disaster recovery expense paid (11) (1)

Income taxes paid (7,210) (23,516)

Net cash provided by operating activities 64,040 37,786

10

(Millions of yen)







Net cash provided by (used in) investing activities

Purchase of property, plant and equipment (24,737) (36,571)

Proceeds from sales of property, plant and equipment 273 154

Purchase of intangible assets (560) (164)

Purchase of investment securities (6,509) (18,100)

Proceeds from sales of investment securities 205 5

Payments into time deposits (135) (500)

Proceeds from withdrawal of time deposits 23 1,144

Payments of short-term loans receivable (3,299) (3,074)

Collection of short-term loans receivable 20 66

Payments of long-term loans receivable (5,949) (15,460)

Collection of long-term loans receivable 126 106

Proceeds from purchase of investments in subsidiaries resulting

in change in scope of consolidation — 183

Net cash used in investing activities (40,542) (72,211)

Net cash provided by (used in) financing activities

Net increase (decrease) in short-term loans payable (872) 709

Proceeds from long-term loans payable 27,924 23,484

Repayment of long-term loans payable (1,027) (1,107)

Proceeds from stock issuance to minority shareholders 25 40

Payments made to trust account for purchase of treasury stock (7,272) —

Decrease (increase) in treasury stock (2,752) (41)

Cash dividends paid (6,730) (11,044)

Cash dividends paid to minority shareholders (558) —

Net cash provided by (used in) financing activities 8,738 12,041

Effect of exchange rate change on cash and cash equivalents 344 6,878

Net increase (decrease) in cash and cash equivalents 32,580 (15,506)

Cash and cash equivalents at beginning of period 185,708 239,691

Increase (decrease) in cash and cash equivalents resulting from

change of scope of consolidation — 19

Cash and cash equivalents at end of period 218,288 224,204

11

(4) Notes Relating to Consolidated Financial Statements

(Note Relating to the Going Concern Assumption)

There are no pertinent items.

(Significant Changes in Shareholders’ Equity)

There are no pertinent items.

(Segment Information and Others)

Segment Information

1. Information on Net Sales and Income by Reported Segment

Six months ended September 30, 2012 (from April 1, 2012, to September 30, 2012) (Millions of yen)

Mineral

Resources Smelting &

Refining Materials

Total of the Reported Segments

Other Businesses

Adjustments 1

Amounts Reported in

the Consolidated Statements of

Income 2

Net sales:

Outside

customers 33,005 285,293 78,830 397,128 1,324 — 398,452

Intersegment 19,063 27,768 8,723 55,554 4,145 (59,699) —

Total 52,068 313,061 87,553 452,682 5,469 (59,699) 398,452

Segment

income 34,639 5,933 352 40,924 443 (2,159) 39,208

Six months ended September 30, 2013 (from April 1, 2013, to September 30, 2013) (Millions of yen)

Mineral

Resources

Smelting &

Refining Materials

Total of the

Reported

Segments

Other

Businesses Adjustments 1

Amounts

Reported in

the

Consolidated

Statements of

Income 2

Net sales:

Outside

customers 38,240 308,442 67,742 414,424 1,590 — 416,014

Intersegment 19,105 8,896 7,209 35,210 7,648 (42,858) —

Total 57,345 317,338 74,951 449,634 9,238 (42,858) 416,014

Segment

income 34,380 15,566 5,487 55,433 337 768 56,538

(Note) 1. The adjustments for segment income are as follows: (Millions of yen)

Six Months Ended

September 30, 2012

Six Months Ended

September 30, 2013

Head Office expenses not allocated to each reported segment a (592) (1,201)

Interest on internal loans to be borne by each reported segment b 393 307

Eliminations of inter-segment transactions among the reported

segments 2,653 (359)

Non-operating income (expenses) not allocated to each reported

segment c (4,613) 2,021

Total (2,159) 768

12

*a The Head Office expenses not allocated to each reported segment consist mainly of expenses which are not

attributable to the reported segments, and the balance resulting from the allocation of the amount corresponding to

general and administrative expenses to each reported segment.

*b Interest on internal loans refers to an interest rate burden (in calculating segment income for internal administration

purposes) to be borne by each business segment of the parent company, which does not financially assume interest

expenses, in proportion to its internal loans as calculated in the balance sheets under management of each segment.

Interest on internal loans is obtained by multiplying the internal loans held by each segment of the parent company

by “internal interest rate.”

Internal interest rate is set in view of the actual market interest rate.

The same amount as a total of the interest on internal loans reported by each segment is reported as a negative value

in “Adjustments.” The interest on internal loans is offset in the total for all segments companywide. The interest on

internal loans therefore has no effect on the consolidated financial statements.

*c Non-operating income and expenses not allocated to each reported segment mainly consist of foreign exchange

gains and losses and interest expenses, which are not attributable to the reported segments.

(Note) 2. Segment income is adjusted to match with ordinary income in the consolidated statements of income.

2. Types of Products and Services That Belong to Each Reported Segment

Segment Major Products and Services

Mineral Resources Exploration, development and production of nonferrous metal resources in Japan and overseas, as

well as sales of ores and products

Smelting & Refining Smelting and sales of nickel, copper and zinc, as well as smelting and sales of precious metals

such as gold, silver and platinum

Materials

Manufacturing, processing and sales of advanced materials, including pastes, powder materials

(e.g., nickel powder), battery materials (e.g., nickel hydroxide) and crystalline materials

Manufacturing, processing and sales of semiconductor materials, including lead frames, tape

materials such as copper-clad polyimide film and chip-on-film (COF) substrates.

Manufacturing and sales of automotive exhaust processing catalysts, chemical catalysts, petroleum

refinery and desulfurization catalysts and autoclaved lightweight concrete (ALC) products

Other Businesses Technical engineering and real estate businesses

3. Matters Relating to Changes in the Reported Segments

(Change in the method for measurement of income at business segments)

From the first quarter of fiscal 2013, the measurement method has been changed for more accurate management of operating

results at each segment, and the amount corresponding to the common general and administrative expenses is allocated to

each reported segment by using certain allocation rates.

In addition, while each reported segment had been previously bearing the “cost of capital” as calculated by multiplying the

assets held by each segment by internal interest rate, this method has been changed for more accurate management of

operating results, and now each segment bears the amount corresponding to the interest on internal loans as determined in

the balance sheets of each segment.

Segment Information for the six months ended September 30, 2012 has been prepared in accordance with the method for

measurement of income after the aforementioned change, and is stated in “1. Information on Net Sales and Income by

Reported Segment.”

13

4. Supplementary Information

(1) Overseas Market Prices and Foreign Exchange Rate

A B (A+B)/2 C A-C

Unit

FY2013 First Six Months

Results (April 1, 2013, to September

30, 2013)

FY2013 Third and

Fourth Quarters Forecasts

(October 1, 2013, to March

31, 2014)

FY2013 Forecasts

(April 1, 2013, to March 31,

2014)


Results (April 1, 2012, to September

30, 2012)

Year-Over-Year Increase

(Decrease)

Copper $/t 7,112 7,000 7,056 7,792 -680

Gold $/TOZ 1,370.6 1,300.0 1,335.3 1,632.2 -261.6

Nickel $/lb 6.55 6.30 6.42 7.60 -1.05

Zinc $/t 1,849 1,850 1,850 1,908 -59

Exchange rate

(TTM) ¥/$ 98.86 98.00 98.43 79.42 19.44

(2) Sales Volume, Unit Price and Net Sales for Major Products (the Company)

Reported Segment Product Unit


(Results) (April 1, 2013, to

September 30, 2013)

FY2013 Third and Fourth

Quarters (Forecasts)

(October 1, 2013, to March 31, 2014)

FY2013 (Forecasts)

(April 1, 2013, to March 31, 2014)

Mineral

Resources

Gold and silver

ores

t 76,959 71,684 148,643

¥Thousand/DMT 186 178 182

¥Million 14,347 12,733 27,080

(Gold content) (kg) (3,611) (3,389) (7,000)

Smelting &

Refining

Copper t 211,550 212,070 423,620

¥Thousand/t 713 696 705

¥Million 150,853 147,692 298,545

Gold kg 12,343 11,836 24,179

¥/g 4,367 4,102 4,237

¥Million 53,900 48,552 102,452

Silver kg 94,667 93,000 187,667

¥Thousand/kg 72 67 69

¥Million 6,821 6,188 13,009

Nickel t 31,477 39,842 71,319

¥Thousand/t 1,518 1,397 1,451

¥Million 47,793 55,657 103,450

Zinc t 13,551 40,864 54,415

¥Thousand/t 195 190 191

¥Million 2,642 7,778 10,420

(Including

commissioned

zinc)

(t) (38,461) (40,864) (79,325)

Materials Semiconductor

materials and

advanced

materials

¥Million 31,067 27,651 58,718

(Notes)

1. The Company mainly engages in project production for these major products because the ratio of build-to-order

production is low.

2. Nickel above includes ferronickel.

14

(3) Output by Product (the Company)

Product Unit FY2013 First Six Months

(April 1, 2013, to September 30, 2013)

Copper t 200,403

Gold kg 10,203

Electrolytic nickel t 23,146

Ferronickel t 9,782

Zinc t 24,910

Gold and silver ore t 78,750

(Gold content) (kg) (3,636)

Zinc (Commissioning portion) t 12,571

(Notes)

1. Output includes the portions of commissioning and/or commissioned production.

2. The commissioning portion of zinc is separately presented from “Zinc” as shown in the above table.

consolidated financial results for the second quarter ... · consolidated financial results for the...

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